State ex rel. Hoover v. Minidoka County, 5684

• Decision Date: 28 February 1931
• Docket Number: 5684
• Citation: 50 Idaho 419,298 P. 366
• Parties: STATE on the Relation of E. M. HOOVER, Commissioner of Public Investments, Appellant and Cross-Respondent, v. COUNTY OF MINIDOKA, State of Idaho, a Body Corporate; E. T. HOLLENBECK et al., County Commissioners of Minidoka County et al., Respondents and Cross-Appellants
• Court: Idaho Supreme Court

298 P. 366

50 Idaho 419

STATE on the Relation of E. M. HOOVER, Commissioner of Public Investments, Appellant and Cross-Respondent, v. COUNTY OF MINIDOKA, State of Idaho, a Body Corporate; E. T. HOLLENBECK et al., County Commissioners of Minidoka County et al., Respondents and Cross-Appellants

No. 5684

Supreme Court of Idaho

February 28, 1931

TAXATION-EXEMPTION-STATE OWNED LANDS-CONSTITUTIONAL LAW.

1. Constitutional tax exemption extends to lands purchased by state in foreclosing school fund mortgage (Const., art. 7 sec. 4).

2. "Taxing power" is sovereign power delegatory to local taxing districts to raise funds for public purposes in behalf of sovereignty for public good.

3. Property purchased by state is exempt from tax charges either present or past, under constitutional provision (Const., art. 7, sec. 4).

4. Statutes held not to make it mandatory upon land board or commissioner of public investments to pay delinquent taxes upon lands purchased by state in foreclosing mortgages (C S., sec. 2971; Laws 1923, chap. 107; Laws 1929, chap. 145 secs. 2, 3; Const., art. 7, sec. 4; art. 9, sec. 3).

5. State cannot be required to pay taxes to have title quieted to property it purchased in foreclosing mortgage (Const., art. 7, sec. 4).

6. When state, by receiving sheriff's deed, obtains unconditional title pursuant to foreclosure of school fund mortgages, all past taxes and liens therefor become nil and should be canceled (Const., art. 7, sec. 4).

7. Taxes on land purchased by state in foreclosing school fund mortgages are not nullity, unless state is absolute owner, and are not subject to cancelation if land is redeemed (Const., art. 7, sec. 4).

8. Taxes on farm lands foreclosed for state loan and purchased by state are not subject to cancelation until sheriff's deed on foreclosure issues (Const., art. 7, sec. 4).

9. Trial court has no jurisdiction to enter recommendatory judgment that claim is obligation against state (Const., art. 5, sec. 10).

10. Supreme court's jurisdiction for recommendatory decision on claims against state is original and not appellate (Const., art. 5, sec. 10).

APPEAL from the District Court of the Eleventh Judicial District, for Minidoka County. Hon. A. B. Barclay, Judge.

Action for cancelation of taxes and to quiet title to certain lands. Judgment for plaintiff canceling taxes and quieting title, also judgment that taxes both delinquent, and assessed but not delinquent, are an obligation of the state of Idaho. Reversed and new trial granted.

Judgment reversed and a new trial granted, with directions.

W. D. Gillis, Attorney General, and S.E. Blaine, Harmon E. Hosier and Leon M. Fisk, Assistant Attorneys General, for Appellant and Cross-Respondent.

When a state, being a sovereign power, acquires title to real property, regardless of how the title is acquired, all taxes which have been assessed against said property prior to the acquisition by the state, and which were at the time of acquisition, delinquent and unpaid, or levied and assessed but not delinquent, are canceled and discharged as soon as the state acquires title to such property. (State v. Reed, 47 Idaho 131, 272 P. 1008, 1009; Foster v. Duluth, 120 Minn. 484, 140 N.W. 129, 48 L. R. A., N. S., 707; State v. Locke, 29 N.M. 148, 30 A. L. R 407, 219 P. 790; State v. Snohomish Co., 71 Wash. 320, 128 P. 667; Webster v. Board of Regents of University of California, 163 Cal. 705, 126 P. 974; Const., sec. 4, art. 7; sec. 10, art. 5.)

H. V. Creason, E. V. Larsen and Harlan D. Heist, for Respondents and Cross-Appellants.

1929 Sess. Laws, chap. 145, sec. 1, provides as follows:

"In addition to the other sums which have heretofore been appropriated by this legislature, there is hereby appropriated out of any moneys in the General Fund, not otherwise appropriated, the sum of $ 30,000.00, the same to be paid into the farm mortgage fund in the State Treasury, created by Chapter 107 of the Idaho Session Laws for 1923, to be used for the purpose of paying delinquent taxes, water assessments, fire insurance premiums and expenses of mortgage foreclosure on lands and premises securing farm loans held by the State of Idaho. And against this fund the Commissioner of Public Investments shall present vouchers and warrants shall be issued to carry out the provisions of this act."

By the above the legislature plainly recognized the matter of taxes on property in the same status as the case at bar, as a valid and subsisting obligation to be paid by the state.

Also 1923 Sess. Laws, chap. 107, contains a similar provision.

"The taxes so levied upon the property were levied and assessed by the county for the purposes within its jurisdiction. The bare acquisition of the premises upon which the tax levy attached did not carry with it any interest or estate in the lien therein created for county purposes. There was, therefore, no vesting of any lesser estate, held in the same right or otherwise, through which a merger could be said to result. The plaintiff, when it acquired this land, took it subject to the lien for county purposes to the same extent as would a private purchaser." (City of Santa Monica v. Los Angeles County, 15 Cal.App. 710, 115 P. 945; Jersey City v. Mountville Twp., 84 N.J.L. 43, 85 A. 838; Public Schools v. O'Connor, 143 Mich. 35, 108 N.W. 426.)

MCNAUGHTON, J. Lee, C. J., Givens and Varian, JJ., and Koelsch, D. J., concur.

OPINION

MCNAUGHTON, J.

This action was instituted by the state to quiet title to certain lands in Minidoka county, purchased by the state in foreclosing a school fund mortgage, and to require the County Commissioners to cancel and discharge certain tax liens appearing on the tax records of the county against the lands. The mortgage was foreclosed on the seventh day of September, 1929, and the premises were sold and sheriff's certificate issued to the state on the 19th of October, 1929. This action was begun on the eighth day of September, 1930. Decree was entered on the fourth day of October, 1930.

The taxes involved were for the years 1925, 1926, 1927 and 1928 delinquent, and 1929 assessed but not delinquent at date of the foreclosure sale. It appears the state levies, amounting for said years to $ 82.68, have been paid by the county to the state.

The court by its decree concluded: 1. That the liens for taxes delinquent, and taxes assessed but not delinquent, should be canceled and discharged and title should be quieted in the state. 2. That all the taxes on the premises for the years mentioned were an obligation of the state of Idaho, payable through its proper agencies in the manner provided by law, but that the court has no jurisdiction to render a judgment thereon against the state.

The state has appealed from the second conclusion, and the county by cross-appeal has appealed from the first.

This court has held that tax liens for past taxes are unenforceable against lands owned by the state purchased upon foreclosure of these mortgages. (State v. Reed, 47 Idaho 131, 272 P. 1008, 1009.) This is the general rule in other jurisdictions. Idaho has a constitutional provision exempting property owned by the state from taxation. Some other states have similar constitutional provisions, notably California, Washington and North Dakota, wherein the constitutional exemption has been examined. But states without such constitutional exemption hold that owing to the sovereign character of the state such liens are unenforceable against it.

In examining the decisions on the subject, we find the courts of states having the constitutional exemption, though mentioning the exemption as the Idaho court has done in State v. Reed, supra, have been content in holding simply that the tax lien may not be enforced against the state. This has been so because in the litigation the property involved has been owned and held by the state permanently for a permanent purpose or because the litigation only involved the claim of right to enforce a tax lien against the state. Such a decision will not suffice in this case because this is an action by the state to quiet its title to this property held by it primarily if not solely for the purpose of selling it. Here we are concerned with the effect and standing of liens for past taxes upon the title which the state may convey.

The question here is not entirely answered by our constitutional exemption of state property from taxation, but it is greatly simplified by that provision.

Mr. Cooley, in his work on Taxation, 4th ed., vol. 2, sec. 638, states the rule as follows:

"If there is no constitutional or statutory provision expressly exempting state and municipal property, it is taxable where not devoted to public uses, although it would not be taxable if devoted to public uses. The ultimate test is not municipal ownership, but public use. On the other hand, if such property is expressly exempted by the constitution or a statute, and there are no qualifying words used, the property is exempt regardless of its use."

In discussing the question of exemption of state property, acquired upon foreclosure of a school fund mortgage, this court, in State v. Reed, supra, said:

"Our constitution (art. VII, sec. 4) exempts 'The property of . . . . the state from taxation.' (C. S., sec. 3099 provides that 'The following property is exempt from taxation . . . . property belonging to this state. . . . ' With respect to exemptions from taxation of state property there is, therefore, no distinction between property acquired through the foreclosure of a mortgage and that which may be said to be owned and held for purely governmental purposes. It is our conclusion, therefore, that when the state received the sheriff's deed on foreclosure further proceedings for the enforcement of the...